Must-Know Influencer Marketing FTC Guidelines for Businesses

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Influencer FTC Guidelines

In February 2020, the Federal Trade Commission (FTC) began to crack down on undisclosed influencer marketing social media posts. Its new guidelines set formal rules in place to ensure consumers are made aware of when an influencer is promoting a brand’s product or service in exchange for a benefit.

Whether you’re an individual influencer or a business, it’s important to familiarize yourself with the influencer marketing FTC guidelines. This ensures you’re avoiding deceptive advertising and, in turn, build more trustworthy relationships with your followers. But, how do you stay in compliance?

In this blog post, we will discuss everything individual influencers and businesses alike need to know to abide by the FTC’s influencer marketing regulations. This includes disclosure requirements, guidelines on endorsements, potential civil penalties and more.

How businesses can ensure influencers are following FTC influencer guidelines and requirements

A business must take full responsibility for its influencer partnerships, including sharing legal requirements. While this may look like a simple terms and conditions agreement, businesses can go a step further to ensure the influencers you partner with are up to date on the FTC’s endorsement guides by providing relevant links, examples, and establishing your own clear influencer guidelines.

To stay compliant, your influencer guidelines should include:

Statements, posts, and feedback are true and accurately reflect the honest opinion and experience with your business or product.
When sharing a video, ensuring the disclosure is in the video itself, rather than just the description of the video.
Avoid using abbreviated hashtags, such as #sp, which to the average person wouldn’t be interpreted to mean sponsored.
Ensure a prominent disclosure can be easily seen by the average consumer, not hidden or in small font.
Use clear and easily understood language when sharing the influencer’s “material connection” with your business.
Encourage honesty. Authentic reviews include both negative and positive reviews. Your influencers should feel welcome and encouraged to leave their honest opinion.
Consumers shouldn’t have to click more to find the disclosure.
Don’t hide disclosures within a large block of hashtags.
Don’t endorse a product if it hasn’t been used or tried.

Establish your endorsement guidelines prior to kicking off an influencer marketing campaign. Make your company available to answer and all questions an influencer may have regarding your endorsement guidelines. You can also opt to review posts prior to an influencer publishing them to ensure proper advertising disclosures are made.

Requirements for businesses that have influencers promoting social media contests

A social media contest is another useful campaign for businesses to use to promote the business and attract new followers. They may run contests with the help of influencers or on their own.

To increase the contest and brand’s exposure, a business may ask followers to share a certain hashtag or post. Or, they may ask an influencer to share the contest with their audience. This helps the business be seen by a larger audience and can lead to more engagement and conversion opportunities.

Businesses must make it clear that the word “contest” or “sweepstakes” is used by influencers and followers to comply with the FTC’s endorsement guides. Additionally, using an abbreviated word such as “#sweeps” or “#con” is not enough to properly disclose your contest. Have your influencers use full words and terms instead.

Requirements for influencer online review programs for businesses

Online reviews are crucial for building trust and credibility with customers. And, consumers look to reviews to guide their purchasing choices. More than half of online shoppers (55%) read at least four product reviews prior to purchasing a product. Spam or incentived reviews, however, can drive customers to look elsewhere and are also against the FTC’s rules. The FTC states, “if you give free products to reviewers you should disclose next to any average or other summary rating that it includes reviewers who were given free products”.

A business may reach out to an influencer to leave a review about their product for a fee or in exchange for a free product. Influencers should share in their review that they were given the product for free in exchange for an honest review. This level of transparency shows your reviews, while not intentionally swayed to be positive, may be rated more highly due to reviewers receiving a free product.

FTC requirements for social media influencers

Social media platforms are inundated with personal and professional recommendations for products and services. Many consumers turn to online influencers to determine if and when they should purchase a product or service.

Nearly half of the respondents (49 percent) in a survey said they rely on influencers for product recommendations. These recommendations also turn into conversions. Forty percent of the same respondents have purchased something online based on seeing it used by an influencer on Twitter, YouTube, or Instagram.

As trust in the influencer marketing industry still remains high, its imperative businesses and influencers comply with FTC rules to continue this trust. The FTC states that if a business is rewarding an influencer, an influencer should share this in their social post.

As an influencer, the FTC disclosure requirements state your endorsement message should make it obvious when you have a relationship (“material connection”) with the brand. This includes a personal, family, or company employee relationship or a financial relationship. Financial relationships refer to instances such as the brand paying you or giving you free or discounted products or services.

By disclosing that you’re working with a brand, this will likely be perceived as a more authentic endorsement and prevents financial penalties on both ends for not complkying with legal requirements.

Requirements for influencers promoting products they’ve paid for themselves

Influencers often question when they need to share if they’re working with a brand in their influencer content. For example, if you’re a blogger and purchased beauty products, such as a new eyeliner, and share how much you like the eyeliner, do you need to mention you paid for it yourself? The FTC states it “is only concerned about endorsements that are made on behalf of a sponsoring advertiser”.

In the instance of promoting the eyeliner the blogger paid for themselves, they would not need to disclose the brand. This is because the brand did not pay the blogger of give them something of value.

Additionally, if the blogger receives a free sample of the eyeliner because the store is giving out free samples to all customers, they would also not need to disclose this.

How to access more information about FTC influencer marketing policies and complaints

Have additional questions or need assistance? The FTC recommends sending them to endorsements@ftc.gov.

If you’d like to file a consumer complaint or get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. Additionally, you can also watch a video, How to File a Complaint, at consumer.ftc.gov/media to learn more about filing complaints.

Concluding thoughts

Both businesses and influencers are responsible for understanding the FTC’s guidelines to avoid deceptive advertising.

As a business, instruct your influencers to disclose the partnership and provide detailed guidelines as well as resources they can refer to. As an influencer, stay current on the FTC’s guidelines as well as the business’ own guidelines for posting. By doing so, you’ll avoid civil penalties, promote trust, and continue to build your following in an ethical manner.